We employ a non-parametrical approach to growth accounting (Data Envelopment Analysis,
DEA) to disentangle the proximate sources of labour productivity growth in 41 nations
between 1929 and 1950 by decomposing productivity growth into four components:
technological change; efficiency catch-up (movements towards the production frontier),
capital accumulation and human capital accumulation. We show that efficiency catch-up
generally explains productivity growth, whereas technological change and factor
accumulation were limited and distorted by the effects of war. War clearly hampered
efficiency. Moreover, an unbalanced ratio of human capital to physical capital (a gap to the
technological leader) was crucial for efficiency catching-up.